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Embraer (ERJ) Expands in the Freighters Market With P2F
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Embraer S.A.(ERJ - Free Report) recently launched the E190F and E195F Passenger to Freight Conversions (P2F) aircraft in the air freight market in a bid to capitalize on the growing demand. The company seeks to convert all pre-owned E190 and E195 aircraft with the expectation to begin their services in early 2024.
The move is in sync with Embraer’s aim to build a strong business in the air freight market by adding 50% more volume capacity, three times the range of large cargo turboprops, and with nearly 30% lower operating costs than narrowbodies. Such an enhanced version of the jets is likely to result in multiple contract wins for ERJ from airlines going forward.
Rationale Behind the Launch
The latest launch by Embraer is in sync with its motive to boost fast deliveries and decentralize operations in the fast-growing e-commerce market. The company aims to achieve this through its earlier E-Jets that came into service around 10 to 15 years ago and are now emerging from long-term leases and entering their replacement cycles.
Hence, the current measure will increase the life of the E-Jets by another 10 to15 years and will make them eco-friendly and efficient.
Additionally, as e-commerce and cargo markets continue to gain momentum, the recent launch by Embraer will be instrumental for its growth in the freighters market. In this context, it is imperative to mention that ERJ anticipates a market size of nearly 700 aircraft over the next 20 years for its latest launch. This, in turn, is likely to boost its revenues from the air freighters arena.
Freighter’s Growth Prospects
Strong demand in the e-commerce market is likely to lift the growth of the freighters market. As the global goods trade continues to rise, the air freighters market will remain a highly prospective arena to invest in. Per the report from Mordor Intelligence, the freighter aircraft market is anticipated to witness a CAGR of more than 4.5% during the 2022-2027 period.
Such abounding growth projections provide ample prospects for companies like Embraer to capitalize and prosper in the emerging trend. Other aerospace majors who boast the potential to benefit from the growing freighters market are Airbus SE (EADSY - Free Report) and Boeing (BA - Free Report) .
Airbus’ freighter and cargo jets fleet mainly comprise the A330-200F, A321P2F, A330P2F BelugaST and BelugaXL. The newest addition to this fleet is the A350F, equipped with the latest-generation innovation from the A350. The freighter also bears features that reduce fuel burn and CO2 emissions. The A330-200F is a new-generation cargo aircraft that meets the freight business’ requirements in the mid-size and long-haul segments.
Moreover, the A330P2F and A321P2F are passenger aircraft converted to freighters, providing a cost-effective and highly efficient option to customers. The Zacks Consensus Estimate for Airbus’ 2022 sales indicates growth of 9.7% from the prior-year figure.
The Boeing freighter family delivers the right payload capacity and range capability. Its freighters fleet consists of the high-volume 747-8 Freighter and the long-range 777 Freighter and the market leading standard-body 737-800 Boeing Converted Freighter. The company recently launched the 777-8 freighter family as the world’s most capable and fuel-efficient freighter for a sustainable future.
Boeing boasts a long-term earnings growth rate of 4%. Shares of BA have appreciated 26.6% in the past year.
Price Performance
Shares of Embraer have rallied 41.5% in the past year against the industry’s decline of 28.4%.
The Zacks Consensus Estimate for Huntington Ingalls’ 2022 earnings suggests growth of 14.1% from the prior-year reported figure. Huntington Ingalls has returned 18.2% to its investors in the past year.
HII has a four-quarter earnings surprise of 22.22%. The Zacks Consensus Estimate for Huntington Ingalls’ 2022 sales implies growth of 13.9% from the prior-year figure.
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Embraer (ERJ) Expands in the Freighters Market With P2F
Embraer S.A.(ERJ - Free Report) recently launched the E190F and E195F Passenger to Freight Conversions (P2F) aircraft in the air freight market in a bid to capitalize on the growing demand. The company seeks to convert all pre-owned E190 and E195 aircraft with the expectation to begin their services in early 2024.
The move is in sync with Embraer’s aim to build a strong business in the air freight market by adding 50% more volume capacity, three times the range of large cargo turboprops, and with nearly 30% lower operating costs than narrowbodies. Such an enhanced version of the jets is likely to result in multiple contract wins for ERJ from airlines going forward.
Rationale Behind the Launch
The latest launch by Embraer is in sync with its motive to boost fast deliveries and decentralize operations in the fast-growing e-commerce market. The company aims to achieve this through its earlier E-Jets that came into service around 10 to 15 years ago and are now emerging from long-term leases and entering their replacement cycles.
Hence, the current measure will increase the life of the E-Jets by another 10 to15 years and will make them eco-friendly and efficient.
Additionally, as e-commerce and cargo markets continue to gain momentum, the recent launch by Embraer will be instrumental for its growth in the freighters market. In this context, it is imperative to mention that ERJ anticipates a market size of nearly 700 aircraft over the next 20 years for its latest launch. This, in turn, is likely to boost its revenues from the air freighters arena.
Freighter’s Growth Prospects
Strong demand in the e-commerce market is likely to lift the growth of the freighters market. As the global goods trade continues to rise, the air freighters market will remain a highly prospective arena to invest in. Per the report from Mordor Intelligence, the freighter aircraft market is anticipated to witness a CAGR of more than 4.5% during the 2022-2027 period.
Such abounding growth projections provide ample prospects for companies like Embraer to capitalize and prosper in the emerging trend. Other aerospace majors who boast the potential to benefit from the growing freighters market are Airbus SE (EADSY - Free Report) and Boeing (BA - Free Report) .
Airbus’ freighter and cargo jets fleet mainly comprise the A330-200F, A321P2F, A330P2F BelugaST and BelugaXL. The newest addition to this fleet is the A350F, equipped with the latest-generation innovation from the A350. The freighter also bears features that reduce fuel burn and CO2 emissions. The A330-200F is a new-generation cargo aircraft that meets the freight business’ requirements in the mid-size and long-haul segments.
Moreover, the A330P2F and A321P2F are passenger aircraft converted to freighters, providing a cost-effective and highly efficient option to customers. The Zacks Consensus Estimate for Airbus’ 2022 sales indicates growth of 9.7% from the prior-year figure.
The Boeing freighter family delivers the right payload capacity and range capability. Its freighters fleet consists of the high-volume 747-8 Freighter and the long-range 777 Freighter and the market leading standard-body 737-800 Boeing Converted Freighter. The company recently launched the 777-8 freighter family as the world’s most capable and fuel-efficient freighter for a sustainable future.
Boeing boasts a long-term earnings growth rate of 4%. Shares of BA have appreciated 26.6% in the past year.
Price Performance
Shares of Embraer have rallied 41.5% in the past year against the industry’s decline of 28.4%.
Image Source: Zacks Investment Research
Zacks Rank & a Key Pick
Embraer currently carries a Zacks Rank #2 (Buy). Another similar-ranked stock from the same industryis Huntington Ingalls Industries, Inc. (HII - Free Report) .You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Huntington Ingalls’ 2022 earnings suggests growth of 14.1% from the prior-year reported figure. Huntington Ingalls has returned 18.2% to its investors in the past year.
HII has a four-quarter earnings surprise of 22.22%. The Zacks Consensus Estimate for Huntington Ingalls’ 2022 sales implies growth of 13.9% from the prior-year figure.